Correlation Between Visa and Rompetrol Rafi
Can any of the company-specific risk be diversified away by investing in both Visa and Rompetrol Rafi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Rompetrol Rafi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Rompetrol Rafi, you can compare the effects of market volatilities on Visa and Rompetrol Rafi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Rompetrol Rafi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Rompetrol Rafi.
Diversification Opportunities for Visa and Rompetrol Rafi
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Rompetrol is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Rompetrol Rafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rompetrol Rafi and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Rompetrol Rafi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rompetrol Rafi has no effect on the direction of Visa i.e., Visa and Rompetrol Rafi go up and down completely randomly.
Pair Corralation between Visa and Rompetrol Rafi
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.59 times more return on investment than Rompetrol Rafi. However, Visa Class A is 1.7 times less risky than Rompetrol Rafi. It trades about 0.08 of its potential returns per unit of risk. Rompetrol Rafi is currently generating about -0.02 per unit of risk. If you would invest 21,038 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 9,954 from holding Visa Class A or generate 47.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.38% |
| Values | Daily Returns |
Visa Class A vs. Rompetrol Rafi
Performance |
| Timeline |
| Visa Class A |
| Rompetrol Rafi |
Visa and Rompetrol Rafi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Rompetrol Rafi
The main advantage of trading using opposite Visa and Rompetrol Rafi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Rompetrol Rafi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rompetrol Rafi will offset losses from the drop in Rompetrol Rafi's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Rompetrol Rafi vs. AROBS TRANSILVANIA SOFTWARE | Rompetrol Rafi vs. Digi Communications NV | Rompetrol Rafi vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Rompetrol Rafi vs. Compania Hoteliera InterContinental |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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